1
Page 35
Exhibit 10(iii)A(q)
STOCK OPTION AGREEMENT
FOR NONEMPLOYEE DIRECTORS
THIS AGREEMENT, made as of the ____ day of ___________,
199__ (the "Grant Date"), between National Service Industries,
Inc., a Delaware corporation (the "Company"), and
_________________ (the "Optionee").
WHEREAS, the Company has adopted the National Service
Industries, Inc. 1992 Nonemployee Directors' Stock Option Plan
(the "Plan") in order to provide additional incentive to
nonemployee directors to exert maximum efforts for the success of
the Company; and
WHEREAS, pursuant to the terms of the Plan, the Optionee is
entitled to the option grant provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee the
right and option (the "Option") to purchase all or any part of an
aggregate of ___________ whole Shares subject to, and in
accordance with, the terms and conditions set forth in this
Agreement.
1.2 The Option is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422A of the
Code.
1.3 This Agreement shall be construed in accordance
and consistent with, and subject to, the provisions of the Plan
(the provisions of which are incorporated herein by reference)
and, except as otherwise expressly set forth herein, the
capitalized terms used in this Agreement shall have the same
definitions as set forth in the Plan.
2. Purchase Price.
The price at which the Optionee shall be entitled to
purchase Shares upon the exercise of the Option shall be
$_________ per Share.
3. Duration of Option.
The Option shall be exercisable to the extent and in
the manner provided herein for a period of ten (10) years from
the Grant Date (the "Exercise Term"); provided, however, that the
Option may be earlier terminated as provided in Section 6 hereof.
2
Page 36
Exhibit 10(iii)A(q)
4. Exercisability of Option.
Unless otherwise provided in this Agreement or the
Plan, the Option shall entitle the Optionee to purchase, in whole
at any time or in part from time to time, the shares covered by
the option after the expiration of one (1) year from the Grant
Date.
5. Manner of Exercise and Payment.
5.1 Subject to the terms and conditions of this
Agreement and the Plan, the Option may be exercised by delivery
of written notice to the Company, at its principal executive
office. Such notice shall state that the Optionee is electing to
exercise the Option and the number of Shares in respect of which
the Option is being exercised and shall be signed by the person
or persons exercising the Option. If requested, such person or
persons shall (i) deliver this Agreement to the Secretary of the
Company who shall endorse thereon a notation of such exercise and
(ii) provide satisfactory proof as to the right of such person or
persons to exercise the Option.
5.2 The notice of exercise described in Section 5.1
shall be accompanied by the full purchase price for the Shares in
respect of which the Option is being exercised, in cash, by check
or by transferring Shares to the Company having a Fair Market
value on the day preceding the date of exercise equal to the cash
amount for which such Shares are substituted.
5.3 Upon receipt of notice of exercise and full
payment for the Shares in respect of which the Option is being
exercised, the Company shall, subject to Section 12 of the Plan,
take such action as may be necessary to effect the transfer to
the Optionee of the number of Shares as to which such exercise
was effective.
5.4 The Optionee shall not be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any
Shares subject to the Option until (i) the Option shall have been
exercised pursuant to the terms of this Agreement and the
Optionee shall have paid the full purchase price for the number
of Shares in respect of which the Option was exercised, (ii) the
Company shall have issued and delivered the Shares to the
Optionee, and (iii) the Optionee's name shall have been entered
as a stockholder of record on the books of the Company, whereupon
the Optionee shall have full voting and other ownership rights
with respect to such Shares.
6. Termination of Service.
6.1 Termination for Cause. If the Optionee's service
as a Director terminates for Cause, the Option shall immediately
terminate in full and no rights hereunder may be exercised.
6.2 Other Termination of Service. If the Optionee's
service as a Director is terminated for any reason other than for
Cause, the Option shall continue to be exercisable in whole or in
part (to the extent exercisable on the date of such termination)
at any time within
3
Page 37
Exhibit 10(iii)A(q)
three (3) years after the date of such termination, but in no
event after the expiration of the Exercise Term. In the event of
the Optionee's death, the Option shall be exercisable, to the
extent provided in the Plan and this Agreement, by the legatee or
legatees under his will, or by his personal representatives or
distributees and such person or persons shall be substituted for
the Optionee each time the Optionee is referred to herein.
7. Effect of Change in Control.
Notwithstanding anything contained in this Agreement to
the contrary, in the event of a Change in Control, (i) theOption
shall become immediately and fully exercisable, and (ii) the
Optionee will be permitted to surrender for cancellation within
sixty (60) days after such Change in Control, the Option or any
portion of the Option to the extent not yet exercised and the
Optionee shall be entitled to receive immediately a cash payment
in an amount equal to the excess, if any, of (A) the greater of
(x) the Fair Market value, on the date preceding the date of the
surrender, of the Shares subject to the Option or portion of the
Option surrendered or (y) the Adjusted Fair Market Value of the
Shares subject to the Option or the portion of the Option
surrendered, over (B) the aggregate purchase price for such
Shares under the Option; provided, however, that if the Option
was granted within six (6) months prior to the Change in Control,
the Optionee shall be entitled to surrender for cancellation the
Option or any portion of the Option during the sixty (60) day
period following the expiration of six (6) months from the Grant
Date and to receive the amount described above with respect to
such surrender for cancellation.
8. Nontransferability.
The Option shall not be transferable other than by will
or by the laws of descent and distribution. During the lifetime
of the Optionee, the Option shall be exercisable only by the
Optionee.
9. No Right to Continuing Service.
Nothing in this Agreement or the Plan shall be
interpreted or construed to confer upon the Optionee any right
with respect to continuance of service as a director of the
Company, nor shall this Agreement or the Plan interfere in any
way with the right of the Company to terminate the Optionee's
service as a director at any time.
10. Adjustments.
In the event of a Change in Capitalization, the Board
shall make appropriate adjustments to the number and class of
Shares or other stock or securities subject to the Option and the
purchase price for such Shares or other stock or securities. The
Board's adjustment shall be made in accordance with the
provisions of Section 7 of the Plan and shall be effective and
final, binding, and conclusive for all purposes of the Plan and
this Agreement.
4
Page 38
Exhibit 10(iii)A(q)
11. Terminating Events.
Subject to Section 7 hereof, upon the effective date of
(i) the liquidation or dissolution of the Company or (ii) a
merger or consolidation of the Company (a "Transaction"), the
Option shall continue in effect in accordance with its terms and
the Optionee shall be entitled to receive in respect of all
Shares subject to the Option, upon exercise of the Option, the
same number and kind of stock, securities, cash, property, or
other consideration that each holder of Shares was entitled to
receive in the Transaction.
12. Optionee Bound by the Plan.
The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions
thereof.
13. Modification of Agreement.
This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only
by a written instrument executed by the parties hereto.
14. Severability.
Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or invalid
for any reason, the remaining provisions of this Agreement shall
not be affected by such holding and shall continue in full force
in accordance with their terms.
15. Governing Law.
The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Delaware without giving effect to the conflicts of
laws principles thereof.
16. Successors in Interest.
This Agreement shall inure to the benefit of and be
binding upon each successor to the Company. This Agreement shall
inure to the benefit of the Optionee's legal representatives.
All obligations imposed upon the Optionee and all rights granted
to the Company under this Agreement shall be final, binding and
conclusive upon the Optionee's heirs, executors, administrators
and successors.
5
Page 39
Exhibit 10(iii)A(q)
17. Resolution of Disputes.
Any dispute or disagreement which may arise under, or
as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be determined
by the Board. Any determination made hereunder shall be final,
binding, and conclusive on the Optionee and the Company for all
purposes.
ATTEST: NATIONAL SERVICE INDUSTRIES, INC.
/s/ Kenyon W. Murphy By: /s/ D. Raymond Riddle
Secretary D. Raymond Riddle, Chairman
of the Board
and Chief Executive Officer
Name of Optionee: